ADM to Cut Jobs as Soft Oilseed Demand Hurts Results

Archer Daniels Midland (ADM), a leading global agribusiness company, has announced plans to cut costs and simplify its portfolio in response to softer market conditions and policy uncertainty. The company reported weaker-than-expected fourth-quarter earnings and revenue, with operating profit at its Ag Services & Oilseed division plunging 32% year-over-year. ADM's Crushing subsegment operating profit fell by 46% compared to the prior year quarter, as increased industry run rates, higher manufacturing costs, and biofuel and trade policy uncertainty drove lower executed crush margins in North America.



ADM plans to eliminate 600 to 700 jobs in 2025 as part of its cost-cutting plan, which aims to deliver $500 million to $750 million in savings over the next three to five years. The company is also focused on improving operational performance, accelerating cost savings, and simplifying its portfolio to better align resources for long-term sustainable growth. ADM's CEO, Juan Luciano, stated that the company is committed to driving simplification and better aligning its resources to deliver long-term sustainable growth.



ADM's cost-cutting plan is in line with the strategies employed by its peers in the agriculture commodities sector. For instance, Cargill announced plans to cut 2,000 jobs worldwide in 2021, representing about 2% of its global workforce, as part of a restructuring effort to improve efficiency and reduce costs. Similarly, ADM announced a restructuring plan in 2020 that included the elimination of 1,000 jobs, or about 2% of its global workforce, as part of an effort to reduce costs and improve efficiency.

In conclusion, ADM's cost-cutting plan is a response to softer market conditions and policy uncertainty, as well as a desire to simplify the portfolio and better align resources for long-term sustainable growth. The company's plan to cut 600 to 700 jobs in 2025 is in line with the strategies employed by its peers in the agriculture commodities sector. By implementing this plan, ADM aims to improve operational efficiency and long-term growth prospects. However, the long-term impact on the company's growth prospects will depend on how successfully ADM manages the transition and mitigates potential negative consequences.